Bigger Is Better
Surgeons and experts say that the volume of patients your practice sees will dictate whether you can bring on a retinal specialist.
“The first question is, ‘Do you have associate doctors?’ ” says Kevin Corcoran, co-owner of Corcoran Consulting Group in San Bernardino, California. “If you are solo, the number of patients needing attention from a retinal specialist is likely very small, so the proposition is very weak.” Multiple doctors, however, have an easier time bringing on a retinal specialist because they have the patient volume to justify it. In general, Mr. Corcoran says it takes about 20 ophthalmologists to support a full-time retina specialist.
If you don’t have a large enough volume to support a full-time retinologist, though, you may be able to come to an agreement with someone to attend to your patients on a part-time basis. “More multispecialty practices are adding retina, as their primary and secondary care provider bases grow to the scale where they can support such individuals,” says practice management consultant John Pinto, whose San Diego consulting firm specializes in ophthalmology. “They’ll often do this by bringing in part-time medical or surgical retinologists from another pure retina practice. They fill more and more of that person’s schedule—one day per week, two days per week—until they reach the crossover point where it’s more cost-effective to bring a person in-house.” A bit of luck may be needed, however, because it can be challenging to find someone willing to come in part time, since his own retinal practice would probably keep him busy enough. “The decision to bring in a retinal specialist quite often depends on who replies to your classified advertisements and who you’re able to recruit,” says Mr. Pinto.
Bringing Someone In
Keith Casebolt, chief executive officer of Medical Eye Center in Medford, Ore., says he and his staff did an analysis of their patient composition and referral patterns and decided to hire a retinal specialist last year. Here’s a look at his practice’s experience, accompanied by comments from experts on various aspects of this process.
• The practice’s makeup. “We now have six MDs and two optometrists,” Mr. Casebolt explains. “The ophthalmologists are all subspecialty-trained: two glaucoma; two cornea; one oculoplastics and one retina. Of the cornea specialists, one does anterior segment procedures while the other just does LASIK.”
• A referral analysis. Mr. Casebolt says retina filled a niche for the practice. “The thinking was that, of the specialties we didn’t have, retina would be the easiest one to add, given that a retina surgeon wouldn’t be in competition and splitting volume with the other ophthalmologists. In our analysis, we looked at how much we were referring out and what kind of diagnoses were in our database. We applied some assumptions to those diagnoses such as how many times per year those patients might need to be seen by a typical retinologist and then we kind of backed into a number of visits and expected revenue to create a pro forma on how we thought it would work.” Mr. Casebolt says his practice’s retinal specialist was full-time from the start, rather than part-time. “It’s tough to find people who are looking for part-time work,” he says. “And we were confident that we had enough volume to keep someone busy.”
• The capital outlay. One thing that stops some practices from adding a retina specialist is the fact that he needs a number of expensive pieces of equipment. Phil Rosenfeld, MD, medical retina residency director at the Bascom Palmer Eye Institute at the University of Miami, lists equipment that will probably cost around $200,000 to $250,000 all told. “The most important thing is to make sure the office is equipped adequately with OCT imaging, photographic and autofluorescence imaging and angiographic imaging,” he says. The practice would also need lasers to perform retinal laser procedures, when necessary.
Since anti-VEGF injections are such a mainstay of retinal treatment, the practice will also have to manage those drugs. “We have to keep an inventory of anti-VEGF drugs,” says Mr. Casebolt, “The handling of these drugs is a significant element of the process. We ended up purchasing a piece of software that tracks those injections all the way from ordering and receiving them, to using them and determining whether or not they got billed correctly and we were paid properly. The software, called the Physician Office Drug Inventory System [General Medical Services, Kenilworth, N.J.], has saved us thousands of dollars, even though we thought we had done a pretty good job prior to that with the basic system that we had. With it, we’re catching about one mistake per month: For instance, if you have it coded as Avastin but it’s really Lucentis. That’s a big, big error and, if you make it, you’re writing off a lot of money. We also found instances where we got the units wrong and a variety of other small mistakes.”
• Compensation. Though there are many different permutations of how a new physician employee can be compensated, they’re usually variations on a base salary plus a bonus when the doctor surpasses a certain level of collections. For instance, some practices pay $225,000 plus 30 percent of any collections that go above twice that salary amount. “Our typical formula for an employee position is a base salary, then we multiply that base by 2.5,” says Mr. Casebolt. “We give them a percentage of everything above that that they collect.”
Mr. Corcoran recommends obtaining advice from legal counsel and a tax advisor about the terms of the engagement. He says it can be designed as: 1) employment; 2) independent contractor; or 3) landlord/tenant. “Some practices seek to save money on employer taxes by electing independent contractor agreements rather than an employment arrangement,” he says. “Because the IRS might not agree with this election, you should test it using the Internal Revenue Service 20 Questions [ http://art.mt.gov/artists/IRS_20pt_Checklist_%20Independent_Contractor.pdf]. The principle that separates employee from independent contractor is based on control. According to the IRS, an employer exercises control when it provides equipment for work, determines work schedules, provides staff and collects money. If a practice hosts a visiting retina specialist, the degree of control is an important question that has a bearing on the terms of the engagement and the method of compensation. An arrangement that relies on paying the retina specialist a percentage of collections is likely based on an employment agreement rather than an independent contractor agreement.” He says this is another reason practices without enough patient volume must think long and hard before trying to work with a retinal specialist on an intermittent basis. (The third option, landlord/tenant, is almost never appealing because the practice will only be able to charge about $100 to $150 per month in rent.)
• Staffing requirements. The practice has to be prepared to provide the extra manpower necessary to treat retinal patients. “Your billing staff, front-desk staff and technician staff will have to adjust to the retinal doctor’s volume,” says Mr. Pinto. “Typically, in retina you need 1.2 tech payroll hours per visit. So, for example, if the retinal specialist will be seeing 250 patients per month, multiply 250 by 1.2 hours/patient, then divide that by the 173 hours that constitute one full-time equivalent, and you’ll see that you’d need 1.7 tech full-time equivalents, or almost two full-time techs to support the retinal specialist. You also might need extra front desk and billing help. All in all, it usually takes 2.5 hours of lay staff time for each patient visit in a clinic. When you multiply that by the usual $22/hour wage, it means you can expect about $50 or $60 of incremental staff cost per patient visit.”
• Revenue for the practice. Experts say that, as long as you have the patient volume to support him, in addition to servicing your patients who would have had to go elsewhere for their care, the retinal specialist will be providing a revenue stream that didn’t exist previously. Mr. Casebolt, whose retinal specialist also performs surgery, says the retinal cases have ramped up more slowly than they predicted, but that there are signs of growth. “Our retinal revenue is up to $1.2 million per year, excluding the cost of the anti-VEGF injections such as Lucentis, which, at $2,000 per injection, would distort the revenue amount if they were included.” The revenue does, however, include the fees they receive for performing the injections. “I think our pro forma was a little more optimistic regarding the number of patients we thought we’d be referring internally,” Mr. Casebolt adds. “I’ll balance that by saying we live in a region where, compared to the size of the population, it was already very well-served by the number of retinologists in the community. So, we didn’t receive any outside retinal referrals, even though we assumed we’d get a few. Having said that, over time we’re starting to get more referrals from outlying areas two or three hours away. All the counties around us are sparsely populated and have begun referring people to us for cornea, cataract, glaucoma and oculoplastics, and are now starting to refer retinal cases to us, too. Now we’re one-stop shopping for them for patients with eye problems that they can’t deal with.”
Mr. Pinto says the economics of bringing in a medical retinal specialist vs. a surgical retinal specialist depends less on whether he’s surgical or non-surgical and more on how relatively clinically assertive or aggressive he is. “There are retinologists, both medical and surgical, who hit a plateau at $1 million or $1.2 million per year in revenue, and just don’t seem to climb above that,” he says. “Then there are other retinologists who readily climb to a figure approaching $2 million or more and are ready for more beyond that. So, as a practice considers bringing in a physician, I’d put less weight on whether he’s medical or surgical and more weight on his career history and whether he’s used to a larger or higher volume practice and is ready to do the work.”
• Bumps in the road. If you do end up hiring a retinal specialist, as with any change to your practice, there will be some growing pains, experts say.
“Retinal exams tend to take longer, so patients are typically in your building longer, and therefore your waiting room is more full,” says Mr. Casebolt.
Mr. Corcoran indicates that the supply of intravitreal medications such as Lucentis, Eylea, Avastin and other agents pose significant practice-management challenges. Carefully managing inventory is important. Obtaining payment for drugs is critical. “Losing just one vial of Lucentis represents a $2,000 error,” he says. “Your Medicare reimbursement includes a small handling fee of about 6 percent, which isn’t enough that you can make too many mistakes,” he opines.
In addition to logistical and financial concerns, there may also be the issue of personality clashes. “When you are hiring any type of sub-specialist, you’ll find they’re often more challenging to manage and temperamental than a generalist,” says Mr. Pinto. “Neurosurgeons or invasive cardiologists are more temperamental than pediatricians, for example. Note that not every sub-specialist is like this—this isn’t universally present—but if it is present it can be challenging for a manager. This personality might manifest itself as an undue fussiness about equipment or the staff that are required. It might manifest as ‘empire building’—wanting their own separate techs or wing of the building, or it can express itself as a higher level of neediness or a sense of entitlement. To help avoid this, it’s important to do your homework, do your vetting and make sure the chemistry is going to work out.”
Mr. Casebolt says he’s been lucky in this regard with his retina person, but is aware that it could happen in some practices. “I think a lot of it can be avoided by setting expectations and sticking to them,” he says. “It’s not just retina, though. You could find a lot of surgeons who have high expectations and are very driven people. Like any situation where there is someone with a strong personality, the only way it will work is if you have very frank discussions about the working situation before he’s hired. Be as crystal clear as you possibly can, and get most of it in writing because managers might forget what they told people before they came onboard. It’s good to have a long e-mail or a contract to go back to.”
Do It Yourself
Though it’s great if a multispecialty or large group ophthalmology practice can recruit a retinal specialist, experts say there are also populations of underserved patients, with no retinal specialist nearby, for whom it might make sense for a comprehensive ophthalmologist to provide medical retina services. The key, physicians say, is that the general ophthalmologist can’t just dabble in retina; he or she has to approach the task seriously and be armed with the proper training.
The objections raised by the retina community usually center on the fact that providing medical retina is not just about administering anti-VEGF injections, but instead it’s also about diagnosis, understanding clinical trials and, importantly, knowing when and when not to inject. Retinal specialists also worry that comprehensive ophthalmologists may skimp on instrumentation, such as an OCT machine, which could affect their diagnoses.
Katherine Johnson, MD, a comprehensive ophthalmologist practicing in Fairbanks, Alaska, understands these concerns. She says, however, that her excellent residency training and her commitment to technology and continuing retina education make her well-qualified to manage many of her patients’ retinal conditions.
“I’m comprehensive in every sense of the word,” Dr. Johnson says. “I’m 400 miles from any other specialist, so my practice is half medical retina, a reasonable amount of cataract volume, glaucoma and a decent amount of neuro-ophthalmology. I do 25 anti-VEGF injections per week, which is a good amount by Alaskan standards. The injections are scattered in with everything else, such as retinal lasers. I’m procedure-heavy, because the people who come to my clinic tend to have advanced disease or really odd things. I don’t see the diabetic well-eye exams, but instead the ones with massive amounts of proliferation who haven’t seen an eye doctor in 10 years. I see the advanced glaucoma. And, of course, the wet AMD; anyone with dry AMD is seen by my optometrist.”
Dr. Johnson says there’s even an advantage to the generalist managing anti-VEGF injections. “I do a number of injections combined with cataract surgery,” she says. “This means the injection is done in a sterile environment. I also inject vancomycin in my cataract surgery eyes, mainly because endophthalmitis is a concern when you’re hundreds of miles away from the nearest vitrector. So, when I do an injection of anti-VEGF at the time of cataract surgery, it’s as low-risk as you can possibly get. It also makes it easy for the patient, because it’s painless, and she can enjoy the benefits of having it done in the sterile OR.”
Dr. Johnson says one of the keys to her success managing retina patients has been having an advanced digital imaging system that lets her send confounding cases to someone else for consultation, and to know when to refer a patient out. “I have referred some things, such as an acute retinal necrosis patient, with whom I wasn’t willing to do her tap-and-inject. I thought she was beyond the medical-legal scope for the non-fellowship-trained person if the case were to go bad. I sent that patient down to Anchorage. Other times, perhaps once per month, I’ll send patient images to get advice and ideas. But for most cases, such as diabetes, retinal tears, AMD and vessel occlusions, I’m perfectly competent managing them.” In over 7,000 injections, Dr. Johnson’s had one instance of “questionable” endophthalmitis in which the patient had an inflammatory reaction that was culture-negative. Dr. Johnson did a tap-and-inject, and the patient’s vision returned to baseline.
Bascom Palmer’s Dr. Rosenfeld says that though it’s possible for a comprehensive ophthalmologist with the right training to manage retina, there are still conditions to watch out for. “I see quite a few patients come in with an AMD diagnosis who don’t have AMD,” he says. “There are a few conditions that look like AMD, such as chronic central serous chorioretinopathy. And there are lesions that look like neovascularization that aren’t, such as vitelliform lesions. Managing retinal pigment epithelium detachments is always a challenge for the non-retinal specialist, as well.”
Dr. Johnson acknowledges that, in some locations, it might not be politically feasible for a generalist to manage retina. “In a lot of places, if you’re doing medical retina and cataract surgery, the retinal specialists might not send you their cataracts if you don’t send them your retina patients,” she notes. “I think these politics are more important in some of the larger towns where you’re not as remote and you have to maintain a patient referral base. There, it’s a legitimate issue.”
Ultimately, Mr. Corcoran advises that adding a retina specialist is a big step and it needs to be handled carefully. “As a practice gets larger, it makes sense to consider offering retinal sub-specialty care as part of an ophthalmic center of excellence,” he says. “However, dabbling in medical retina as a dilettante is problematic, potentially dangerous, and unlikely to be financially rewarding. Do it seriously or just refer the cases out. Bottom line: Do what you do really well, or don’t do it at all.” REVIEW